The account holder writes out the cheque as normal, but uses a digital pen which ‘reads’ the cheque as it is written. Once completed, they tick a box - the only difference to a normal cheque - and the information is transmitted directly to the payee’s bank account.

Dr John Vines, of Newcastle University, said: “Sending a cheque in a Christmas or birthday card is something many people do - not just the older generation.

“It’s easy and safe but it’s also personal.

“The beauty of this system is that it is a safe and cheap electronic transaction for the banks but it’s a physical paper-based transaction for the customer.”

Project lead Professor Andrew Monk, a psychologist at the University of York, said the 80-year-olds canvassed clearly understood cheque payments.

“Many of us still use cheques and in some cases the only alternative is to hand over cash which often isn’t ideal,” he said.

“For the banks, it’s not only the time and cost of processing cheques but, at present, where you store them after they have been processed.

“But for the bank’s customers - and particularly the older generation - cheques are seen as a vital part of their financial independence.

“They provide a permanent record which means they can easily keep track of what’s being spent.

“The people who worked with us also valued the experience of handing over a signed cheque to a named individual rather than the anonymity of online transactions.

“The beauty of our design is that you not only have something physical to hand over to the recipient, you also have a cheque book stub as a record.”

According to Newcastle University, cheque use has been falling in the UK since 1990. While the number of cheques being written each day is still high - around 3.5 million a day - this is down from 11 million in 1990.

A study by Age UK last year called The Way We Pay revealed 73% of people over 65 in the UK still frequently use cheques.

Michelle Mitchell, Charity Director-General of Age UK, said: “We’re delighted these researchers asked older people what they need and want in this critical part of daily life, paying bills and making payments.

“Hopefully banks will now see the potential and invest in this kind of innovative design which preserves what many people find invaluable about cheques but also makes the most of modern technology.”

Dr Vines added: “The larger lesson from this story is that we all need to listen carefully to what 80 and 90 year olds have to say to us.

“They grew up in a time when financial practices were quite different to the ones we are used to now but their values are pertinent to all of us.”